The independent report, commissioned by the British Generic Manufacturers Association, underlines the critical importance of the UK generic medicine sector and how it provides sustained and significant savings to the NHS.

The in-depth study compared actual sales prices charged by manufacturers - the price before margins for pharmacy, wholesale and distribution costs have been added. The analysis showed that average actual manufacturer selling prices for readily available generics are typically around half the Drug Tariff or reimbursement price - the cost that the NHS pays for a medicine.

The analysis focused on primary care and sales of medicines through community pharmacies, and concluded that the market for the supply of generic medicines in the UK is functioning well and delivering significant price reductions following loss of patent exclusivity from originators.

Other main findings included:

The actual selling prices charged by generic manufacturers in the UK are significantly lower than the price of the originator’s branded product in the UK before the loss of exclusivity. On average across a number of products, generic prices over a four-year period after entry are 70–90% lower.

While generic prices can sometimes increase many years after entry, in the long-run the price is still around 80% lower than the price of the relevant branded product before the loss of exclusivity.

While prices sometimes increase, many of these reverse over time, indicating a well-functioning market. In particular, in a majority of cases where there was a significant price increase over a short time, these had largely dissipated within 12 months. The extent of the reversal was relatively lower, and slower, for price increases that occurred over a long period of time.

A comparison of prices across five comparable European countries suggests that prices of generic medicines in the UK are generally lower - often by a large amount, up to 4.5 times more expensive than in the UK.

Kim Innes, General Manager of Teva UK Limited, said:

"We’re proud of our track record in making better days for patients by providing high-quality medicines to the NHS. Today’s report confirms that the UK gets good value for money from its generic medicines, making savings that can be spent on innovation, further or other new treatments. Sustainable healthcare is vital for the future of the NHS and this report shows the contribution that companies including Teva make towards that goal."